Following nearly three hours of evading Senate Agriculture Committee questions on Tuesday, a trio of MF Global executives may have thought they’d slipped the noose. In the face of increasingly exasperated committee member questions, the executives – responsible for the eighth-largest bankruptcy in U.S. history and the odd, potentially criminal, loss of an estimated $1.2 billion in customer funds – exhibited amnesia symptoms, reciting a wide range of variations on “I don’t recall.”

But immediately after the executives were dismissed, Terrance Duffy, the CME Group's executive chairman, gave sworn testimony that contradicted former MF Global head Jon Corzine’s claims of ignorance regarding the disappearance of customer funds.

In the days just prior to MF Global’s demise, CME – tasked with auditing MF Global’s futures business – had auditors reviewing the firm’s segregation reports. The Oct. 26 and 27 reports, Duffy says, showed the firm in full compliance. In fact, the Oct. 27 report “showed the firm held $200 million in excess segregated funds.”

“CFTC and CME staff and auditors returned to the firm on Sunday, Oct. 30, and were informed this discrepancy was caused by ‘an accounting error.’ Our auditors, working with CFTC, devoted the rest of the day and night, to find the so-called ‘accounting error.’ No such error was found.

“Instead, at about 2 a.m. on Monday morning, Oct. 31, MF Global informed both the CFTC and CME that the shortfall was real and that customer segregated funds had been transferred out of segregation to the firm’s broker-dealer accounts.

“After receiving this information, CME remained at MF Global while (the firm) attempted to identify funds that could be transferred into segregation to reduce or eliminate the discrepancy.”

Duffy then spiked Corzine’s credibility. “A CME auditor also participated in a phone call with senior MF Global employees, wherein one employee indicated that Mr. Corzine knew about the loans made from the segregated accounts.”

On Monday, Oct. 31, continued Duffy, “MF Global revised its segregation report for Thursday, Oct. 27, indicating that the alleged $200 million in excess segregated funds should have been reported as a deficiency of $200 million. This shortfall on segregation on Thursday, Oct. 27, was hidden by the inaccurate report, a telling sign to keep regulators in the dark.

“It remains to be seen whether this failure to disclose permitted additional segregated funds to be improperly transferred.